Stenprop Limited acquisition positions it for growth

Stenprop Limited, listed on the JSE’s Main Board and the Bermuda Stock Exchange, announced today that it reached agreement to acquire a portfolio of multi-let industrial (MLI) properties as well as the management business that has built up and managed that portfolio, C2 Capital Limited, for a combined consideration that values the two businesses at £130.5 million.

The portfolio, which is operated under the brand industrials.co.uk, comprises 25 high-quality MLI estates located across the UK totalling a gross lettable area of approximately 2 million square feet (200,000 sqm) and a diversified base of over 400 tenants. C2 Capital was established in 2009 by Julian Carey and comprises a team of seven investment and asset management professionals. Following the transaction, the C2 Capital team will be responsible for growing Stenprop’s UK industrial presence under the industrials.co.uk brand in the UK. It is intended that Julian Carey will join the Board of Stenprop.

“The combination of the portfolio and the management platform represents a significant strategic investment for Stenprop. We have been looking for the right opportunity to enter the multi-let industrial sector as we believe it offers tremendous growth opportunities underpinned by a number of positive fundamentals, including constrained supply and growing demand.

“The transaction with industrials.co.uk was a unique meeting of minds. Together we share a common understanding and vision around the multi-let industrial sector and property investment in general and are confident that by combining the industrials.co.uk portfolio with the C2 management platform as well as the Stenprop balance sheet, we can establish Stenprop as a leading player in the UK multi-let industrial space. We are delighted to welcome Julian and his team into Stenprop and look forward to unfolding this vision together,” commented Paul Arenson, CEO of Stenprop.

Julian Carey commented: “The future of multi-let industrial property in the UK and the industrials.co.uk business is bright and we are delighted to be supporting Stenprop’s entry into the sector. Stenprop’s substantial UK and German portfolio of high quality income producing assets is highly complementary to the industrials.co.uk business and the synergies between the Stenprop and C2 Capital teams are highly compelling. My team and I are eager to start working on maximising the value of the combined businesses going forward.”

In the current environment of constrained supply, occupier demand for MLI space is growing as the impact of technology and the internet drives changes in the way people work, shop and interact. Decentralisation in working practices is also driving demand for more localised space.

Well managed MLIs are beginning to achieve significantly higher rental growth when compared to other property asset classes in the UK because of supply constraints, the growing list of uses for MLIs and the historically low absolute rents payable per tenant.

“This transaction provides us with a strategic foothold, economies of scale and management expertise capability in the MLI sector. Our intent is to actively pursue further acquisition opportunities within the MLI sector with the objective of integrating additional properties and portfolios into our newly acquired MLI platform, establishing Stenprop as a leading player in the UK MLI space,” concluded Arenson.